How Walmart is affected by Porters Five forces and technology

Topics: Management, Strategic management, Retailing Pages: 4 (2613 words) Published: October 29, 2014

Michael Porters competitive force model is used to displays how information technology can upgrade the competitiveness of a corporation. It is also used to develop strategies to increase competitive edge. Competitive strategy must grow out of a sophisticated understanding of the structure of the industry and the industry is constantly changing. Regardless of the industry, Michael Porters five forces will bring forward your strengths and weakness. The five forces are: The threat of new entrants, the threat of substitute products, the bargaining power of suppliers, the bargaining power of buyers and the rivalry amongst the existing competitor’s. These five forces determine industry profitability because they shape the prices firms can change, the costs they have to bear and the investment required to compete in the industry. According to the five forces Wal-Mart’s certain competitive condition can be clearly seen. Wal-Mart opened the first store in July of 1962 in Arkansas. The mission for Wal-Mart is to provide lower prices so people could afford to live better. In 2012 they celebrated their 50th anniversary. During this celebration Sam Walton, made it clear that the success of the company was the result of strength of the mission, people, values, and culture. Moreover the future of the corporation was reliant on a continued commitment to strong governance and intensive focus on global ecommerce, social and mobile retailing. Information technology has supported the overall Wal-Mart business strategy and has been a catalyst in actually enabling and creating new business strategies for them. The threat of new entrants has been a concern for every company in every field. Profitable markets always attract new competitors. If more companies come to sell similar goods and service in the market, customers may choose another company, so it will disperse selling ability. The Internet reduces the number of barriers into the market. Years ago a new entrant would have...
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